Friday, November 28, 2008

LibDems Look Into the Abyss Over £2.4 Million Donation

Michael Brown, the man who gave the LibDems £2.4 million, has been convicted of fraud, following an early conviction of perjury. The Electoral Commission has said it will now reopen its investigation as to whether the donation was permissible in the first place. If it finds that it wasn't - and I can't see what other conclusion it can come to - then the LibDems face having to pay back the £2.4 million. That is also the conclusion - or at least the headline - of The Times report

Anti-sleaze laws forbid political parties from accepting corporate donations unless the companies are actually “carrying on business”.But Brown’s 5th Avenue Partners was “just a sham”, Detective Sergeant Nigel Howard of City of London Police's Economic Crime Department told The Times. “It’s just a company that didn’t trade in anything. He just had it as an off-the-shelf company. It sounded good but he never actually traded in any bonds.”

This is key because any due diligence by the LibDems would surely have shown that it was a non trading company. The Times article continues...

The Lib Dem hierarchy persisted in defending Brown even after an investigation by The Times disclosed he had a police record in America where he was wanted for jumping probation. A party spokesman said today: “All our donations from 5th Avenue Partners were received in good faith."

I don't doubt that, and I am certainly not accusing the LibDems of deliberately procuring an illegal donation. But their internal procedures clearly failed, and they did not do enough to find out if Brown's company was a legitimate donor. That much is surely something even most LibDems could agree.

At this stage, an admission of at least some culpability might persuade the Electoral Commission to look more favourably on their position than they might otherwise do.

6 comments:

If Detective Sergeant Nigel Howard thinsks it was a company “that didn’t trade in anything", I am sure he will be concerned that any political donations that the company may have made will have been returned, lest any offence should have been committed under s56(3) PPERA 2000.

I bet the liberals are looking forward to the next election. They are used to having no money, so they'll do their usual trick of covering up all their socialist policies in conservative areas, and vice versa in the north.

it's in everyone's interest that the Lib Dems do well, especially in the North and Scotland where Tories don't do well. It's the only way to ensure Labour is wiped out at the next election. This is bad news.

African Mum said... "it's in everyone's interest that the Lib Dems do well,"

It's more subtle than that. Disaffected Lib Dems are just as likely to vote Conservative or not vote at all as they are to switch to Labour. Any Lib Dem victors are not likely to work with he Conservatives in a hung parliament, so on balance it isn't a bad thing if their vote falls away.

And while we are waiting for the LibDems to admit some culpability for the Michael Brown donation - perhaps the Tories could do the same for the amounts they received from Polly Peck and Asil Nadir - we have been waiting rather a long time now.